Atwood Oceanics: Double Bottom Forming?

Atwood Oceanics (NYSE:ATW) again provides the shortest earnings release of any company we follow [May 8: Atwood Oceanics Short and Sweet Beat]. Matched analysts estimates, and continues to prosper. Fundamentals say buy, technicals say sell/avoid/short - we'll stick to technicals. However, a very nice long term double bottom could be forming in the chart - once commodities come back as the flavor of the week.

Atwood Oceanics, Inc., (News) Houston-based International Drilling Contractor, announced today that the Company earned net income of $60,381,000 or $0.93 per diluted share, on revenues of $141,372,000 for the quarter ended June 30, 2008 compared to net income of $32,033,000 or $0.50 per diluted share, on revenues of $98,371,000 for the quarter ended June 30, 2007.

86% year over year earnings growth for a forward P/E of under 13. The Wall Street circus continues. We'll buy back (since we ignore fundamentals) when it crosses back over both the 50 and 200 day moving average - the 50 day is in the $49s and falling like a rock. Someone else can catch the knife and buy it at the $45s, $44s, $43s, $42s, $41s, $40s or wherever it ends up. Another methodology is to buy this double bottom somewhere around $41 and then stop out below $40 if it breaks that chart formation. However upside will be limited by the 2 major moving averages now acting as resistance...

If a P/E of 13 is not worthy maybe a P/E of 8 will be - we just don't know how far these will go (down).

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